Q.1 Which of the following best defines performance appraisal?
A process of hiring new employees
A method to evaluate employee job performance
A system to reward customers
A strategy for marketing products
Explanation - Performance appraisal is the systematic evaluation of an employee’s job performance and contribution to the organization.
Correct answer is: A method to evaluate employee job performance
Q.2 What is the main purpose of performance management?
To control employee behavior
To enhance employee and organizational performance
To eliminate underperformers immediately
To compare employees against each other
Explanation - Performance management focuses on aligning individual goals with organizational objectives to maximize productivity.
Correct answer is: To enhance employee and organizational performance
Q.3 Which of the following is a common method of performance appraisal?
360-degree feedback
Random selection
Lottery system
Employee age ranking
Explanation - 360-degree feedback gathers input from multiple sources such as peers, subordinates, supervisors, and even self-ratings.
Correct answer is: 360-degree feedback
Q.4 In performance appraisal, 'halo effect' refers to:
A manager’s bias based on one positive trait
Employees working in groups
A high salary benefit
A promotion system
Explanation - The halo effect occurs when a rater allows one positive characteristic of an employee to influence overall ratings.
Correct answer is: A manager’s bias based on one positive trait
Q.5 Which of the following is NOT a goal of performance appraisal?
Providing employee feedback
Identifying training needs
Assessing organizational profit
Supporting promotion decisions
Explanation - Performance appraisal evaluates individual employees, not overall organizational profits.
Correct answer is: Assessing organizational profit
Q.6 What does SMART stand for in performance goal setting?
Specific, Measurable, Achievable, Relevant, Time-bound
Simple, Manageable, Active, Realistic, Tangible
Strategic, Modern, Accurate, Reliable, Transparent
Social, Meaningful, Accountable, Rational, Timed
Explanation - SMART goals help employees and managers set clear, achievable, and trackable objectives.
Correct answer is: Specific, Measurable, Achievable, Relevant, Time-bound
Q.7 What type of bias occurs when managers rate employees lower to avoid giving rewards?
Leniency bias
Severity bias
Central tendency bias
Recency bias
Explanation - Severity bias happens when evaluators deliberately rate employees harshly, often to control rewards or promotions.
Correct answer is: Severity bias
Q.8 Which performance appraisal method involves ranking employees from best to worst?
Paired comparison
Forced distribution
Straight ranking
Critical incident method
Explanation - Straight ranking orders employees from best to worst based on overall performance.
Correct answer is: Straight ranking
Q.9 Which of the following is a disadvantage of 360-degree feedback?
Comprehensive input
Multiple perspectives
Time-consuming process
Developmental feedback
Explanation - Though useful, 360-degree feedback can be resource-intensive and take significant time to implement.
Correct answer is: Time-consuming process
Q.10 What does performance management emphasize more than appraisal alone?
One-time evaluation
Continuous improvement
Salary deductions
Strict punishment
Explanation - Unlike one-time appraisals, performance management is ongoing and focuses on growth and development.
Correct answer is: Continuous improvement
Q.11 Which of the following is a qualitative performance appraisal method?
Graphic rating scale
Checklist method
Essay appraisal
Forced distribution
Explanation - Essay appraisal allows managers to write descriptive evaluations of employee performance.
Correct answer is: Essay appraisal
Q.12 What is the recency bias in performance appraisal?
Evaluating based on the earliest performance
Judging employees by their most recent performance
Basing evaluation on average past records
Focusing on peer reviews only
Explanation - Recency bias occurs when managers give too much weight to recent events instead of the entire appraisal period.
Correct answer is: Judging employees by their most recent performance
Q.13 Which performance appraisal technique uses a predetermined scale to rate employees?
Checklist method
Critical incident method
Graphic rating scale
Ranking method
Explanation - The graphic rating scale evaluates employees based on specific performance dimensions rated on a scale.
Correct answer is: Graphic rating scale
Q.14 Performance appraisal is most useful when it is:
Subjective and vague
Objective and systematic
Random and flexible
Private and secretive
Explanation - Appraisals should be based on objective data and applied consistently to be effective.
Correct answer is: Objective and systematic
Q.15 Who usually conducts performance appraisals?
Government officials
Managers and supervisors
Customers
Suppliers
Explanation - Direct managers and supervisors usually evaluate employees since they closely observe work performance.
Correct answer is: Managers and supervisors
Q.16 Which of the following is a developmental goal of performance appraisal?
Identifying layoffs
Providing salary deductions
Recognizing training needs
Cutting costs
Explanation - Developmental goals focus on identifying areas where employees need training or support.
Correct answer is: Recognizing training needs
Q.17 What is the main drawback of ranking methods of appraisal?
They are easy to use
They encourage team spirit
They do not provide detailed feedback
They improve objectivity
Explanation - Ranking places employees in order but lacks specific information for development.
Correct answer is: They do not provide detailed feedback
Q.18 Central tendency bias occurs when:
Managers rate everyone average
Employees are ranked at extremes
Raters ignore personal bias
Supervisors give only positive feedback
Explanation - Central tendency bias occurs when evaluators avoid extremes and place all employees in the middle.
Correct answer is: Managers rate everyone average
Q.19 Which of these is a benefit of performance management systems?
Clarity of expectations
More office gossip
Less teamwork
Unclear objectives
Explanation - Performance management clarifies expectations, helping employees align with organizational goals.
Correct answer is: Clarity of expectations
Q.20 Which appraisal method records significant examples of effective or ineffective behavior?
Critical incident method
Essay appraisal
Graphic rating scale
Checklist method
Explanation - The critical incident method tracks notable behaviors for later evaluation.
Correct answer is: Critical incident method
Q.21 Why is feedback an essential part of performance management?
It reduces employee pay
It helps employees improve and grow
It eliminates all errors
It replaces training
Explanation - Feedback provides employees with insights to enhance performance and develop skills.
Correct answer is: It helps employees improve and grow
Q.22 What is the role of self-appraisal in performance evaluation?
To eliminate supervisor input
To allow employees to reflect on their own performance
To reduce workload of HR
To replace 360-degree feedback
Explanation - Self-appraisal encourages employees to evaluate their strengths, weaknesses, and achievements.
Correct answer is: To allow employees to reflect on their own performance
Q.23 Which method forces evaluators to distribute ratings into categories like top, average, and poor?
Critical incident method
Forced distribution method
Essay appraisal
Graphic rating scale
Explanation - Forced distribution requires raters to allocate employees across categories, reducing rating inflation.
Correct answer is: Forced distribution method
Q.24 Which factor can negatively affect performance appraisal fairness?
Clear criteria
Rater bias
Objective measures
Consistent standards
Explanation - Bias from the evaluator reduces the fairness and reliability of appraisal results.
Correct answer is: Rater bias
Q.25 Why is performance appraisal linked with organizational rewards?
To punish poor employees
To align performance with recognition
To make salaries secret
To eliminate training needs
Explanation - Performance appraisal helps determine promotions, pay raises, and rewards based on merit.
Correct answer is: To align performance with recognition